Feb. 19 (Bloomberg) -- Ladbrokes Plc, a U.K. operator of
more than 2,000 betting shops, rose the most in 10 months after
Investec Securities recommended buying the shares on growth
prospects with its new online sportsbook.

The shares climbed 4.1 percent to 230.3 pence, their
biggest gain since April 19, giving the company a market value
of about 2.1 billion pounds ($3.2 billion). About 4.4 million
shares traded, more than twice the three month-daily average,
according to data compiled by Bloomberg.

“Ladbrokes should be putting the delay in its sportsbook
relaunch behind it,” Investec analyst James Hollins wrote in a
note today. “On balance we project that the digital platform
driven by superior technology, a strong U.K. brand and margin
enhancement can drive strong divisional earnings growth.”

Ladbrokes, scheduled to report full-year earnings on Feb.
21, has suffered technology delays to its online development.
The company’s U.K. retail earnings before interest and taxes
will increase by 17 percent as it benefits from new gambling
machines and better yield management, Dublin-based brokerage
Goodbody said.

Digital Weakness

“The weakness in digital has been well flagged,” Goodbody
wrote in a note to clients today. “Expectations for online
earnings before interest and tax are pitched very low at
present. We would not be surprised if there was upgrades to this
post Thursday’s numbers.”

Ladbrokes will probably report a full year pretax profit of
173 million pounds, according to the median estimate of 19
analysts in a Bloomberg survey. The company had a pretax profit
of 134.6 million pounds a year earlier.

“Compounded by positive retail trends and increased shop
estate roll out, the group earnings outlook and excellent cash
generation now look undervalued,” wrote Hollins, who raised his
recommendation to buy from hold and increased the share price
target to 250 pence from 165 pence.

The shares have risen 16 percent this year while competitor
William Hill Plc is up 17 percent. Of 26 analysts who share data
with Bloomberg, eight recommend buying the stock, six advise
selling it and 12 say hold.